Thursday August 17, 2017

Washington News

Sen. Hatch and Rep. Neal Discuss Tax Reform

While millions of Americans are on holiday during August, tax committees in Washington are busy drafting a tax reform bill.

Senate Finance Committee Chairman Orrin Hatch (R-UT) was interviewed by national media on August 6. He was asked about the White House proposal to reduce rates to 10%, 25%, and 35%. Hatch responded, "If we could get to those rates, that would be miraculous, and it would be very beneficial for the country."

Hatch then went on to describe a number of obstacles to lowering rates. "Looking at what we have going on in Congress right nowall the difficulties and catfights across the board and the slowdown of everything by the Democrats, the desire not even to let legislation come forthyeah, it would be very difficult to get there."

Rep. Richard Neal (D-MA) is the Ranking Minority Member in the House Ways and Means Committee. He expressed hope that a forthcoming tax bill could help middle-class Americans, rather than reduce payments for those with higher incomes. Neal noted that a tax reform bill should be developed "from the middle out, understanding that concentration of wealth in America is acknowledged by everybody."

Neal suggested that his party could be open to reducing rates for upper-income taxpayers if there are offsetting benefits for the middle class. He continued, "I think one of the challenges you have today - if you have a joint filing of $200,000 and you have three kids in college, you don't feel very wealthy. So I am amenable to the idea of moving that ceiling to make adjustments based on what the other side might be willing to give to the middle class in terms of more incentives."

White House National Economic Council Director Gary Cohn spoke to media on August 4. He continued to promote a lower business tax rate. Cohn stated, "We have to do something structural to the U.S. economy. We cannot be substantially higher than the OECD average tax rate out there." Cohn was referring to the average tax rate of 25% for first world nations who are members of the Organization for Economic Cooperation and Development.

Editor's Note: Sen. Hatch continues to promise protections for both charitable giving and mortgage interest. He stated, "One would be the charitable deduction and the other one would be the mortgage deduction." Hatch suggested that it will not be possible to lower corporate rates to the White House proposed 15% number, but that a corporate rate of 25% is more likely.